Net Sales Growth of 22% Drives Record Quarterly Results
Raises 2022 Outlook Given Continued Strong Performance
“Our third quarter results yet again demonstrate the quality of CODI’s subsidiary businesses, as we delivered another consecutive quarter of record financial performance,” said
Third Quarter 2022 Financial Highlights vs.
- Net sales up 22% to
$597.6 million , and up 15% on a pro forma basis. - Branded consumer net sales up 34% to
$378.2 million , and up 21% on a pro forma basis. - Niche industrial net sales up 7% to
$219.4 million . - Operating income up 16% to
$48.7 million . - Net income down to
$2.6 million vs.$90.2 million in the elevated year-ago period, primarily a result of the$72.7 million gain on the sale of Liberty Safe inAugust 2021 . - Adjusted Earnings, a non-GAAP financial measure, up 28% to
$46.0 million . - Adjusted EBITDA, a non-GAAP financial measure, up 27% to
$98.3 million . - Paid a third quarter 2022 cash distribution of
$0.25 per share on CODI's common shares inOctober 2022 .
Third Quarter 2022 Business Highlights
- Appointed Mr.
Larry L. Enterline as Chairman of the Board of Directors effectiveJuly 2, 2022 . Additionally, Ms.Teri R. Shaffer was appointed to the Board and designated as a member of the Board’s Audit Committee. - On
July 12, 2022 , CODI completed the acquisition ofPrimaLoft Technologies Holdings, Inc. , the parent company ofPrimaLoft, Inc. ("PrimaLoft"), a leading provider of branded, high-performance synthetic insulation and materials used primarily in outerwear and accessories. - 5.11 Tactical subsidiary announced the opening of its 100th retail store location, continuing the execution of expanding its retail footprint.
Third Quarter 2022 Financial Results
Net sales in the third quarter of 2022 were
Branded consumer net sales, pro forma for the Lugano and PrimaLoft acquisitions, increased 21% in the third quarter of 2022 to
Net income for the third quarter of 2022 decreased to
Adjusted Earnings (see “Note Regarding Use of Non-GAAP Financial Measures” below) for the third quarter of 2022 increased 28% to
Adjusted EBITDA (see "Note Regarding Use of Non-GAAP Financial Measures" below) in the third quarter of 2022 was
Liquidity and Capital Resources
As of
As of
Third Quarter 2022 Distributions
On
The Board also declared a quarterly cash distribution of
The Board also declared a quarterly cash distribution of
The Board also declared a quarterly cash distribution of
Increases 2022 Outlook
As a result of CODI’s strong financial performance in the third quarter, its expectations for the remainder of 2022 and its current view of the economy, the Company is raising its outlook. CODI expects its current subsidiaries to produce consolidated subsidiary Adjusted EBITDA for the full year 2022 of between
Conference Call
Management will host a conference call on
Note Regarding Use of Non-GAAP Financial Measures
Adjusted EBITDA and Adjusted Earnings are non-GAAP measures used by the Company to assess its performance. We have reconciled Adjusted EBITDA to Income (Loss) from Continuing Operations and Adjusted Earnings to Net Income (Loss) on the attached schedules. We consider Income (Loss) from Continuing Operations to be the most directly comparable GAAP financial measure to Adjusted EBITDA and Net Income (Loss) to be the most directly comparable GAAP financial measure to Adjusted Earnings. We believe that Adjusted EBITDA and Adjusted Earnings provides useful information to investors and reflects important financial measures as it excludes the effects of items which reflect the impact of long-term investment decisions, rather than the performance of near-term operations. When compared to Net Income (Loss) and Income (Loss) from Continuing Operations, Adjusted Earnings and Adjusted EBITDA, respectively, are each limited in that they do not reflect the periodic costs of certain capital assets used in generating revenues of our businesses or the non-cash charges associated with impairments, as well as certain cash charges. The presentation of Adjusted EBITDA allows investors to view the performance of our businesses in a manner similar to the methods used by us and the management of our businesses, provides additional insight into our operating results and provides a measure for evaluating targeted businesses for acquisition. The presentation of Adjusted Earnings provides insight into our operating results and provides a measure for evaluating earnings from continuing operations available to common shareholders. We believe Adjusted EBITDA and Adjusted Earnings are also useful in measuring our ability to service debt and other payment obligations.
Pro forma net sales is defined as net sales including the historical net sales relating to the pre-acquisition periods of Lugano and PrimaLoft, assuming that the Company acquired Lugano and PrimaLoft on
In reliance on the unreasonable efforts exception provided under Item 10(e)(1)(i)(B) of Regulation S-K, we have not reconciled 2022 Adjusted EBITDA or 2022 Adjusted Earnings to their comparable GAAP measure because we do not provide guidance on Net Income (Loss) from Continuing Operations or Net Income (Loss) or the applicable reconciling items as a result of the uncertainty regarding, and the potential variability of, these items. For the same reasons, we are unable to address the probable significance of the unavailable information, which could be material to future results.
Adjusted EBITDA, Adjusted Earnings and pro forma net sales are not meant to be a substitute for GAAP measures and may be different from or otherwise inconsistent with non-GAAP financial measures used by other companies.
About
Since its founding in 1998, CODI has consistently executed on its strategy of owning and managing a diverse set of highly defensible, middle-market businesses across the niche industrial, branded consumer and healthcare sectors. The Company leverages its permanent capital base, long-term disciplined approach, and actionable expertise to maintain controlling ownership interests in each of its subsidiaries, maximizing its ability to impact long-term cash flow generation and value creation. The Company provides both debt and equity capital for its subsidiaries, contributing to their financial and operating flexibility. CODI utilizes the cash flows generated by its subsidiaries to invest in the long-term growth of the Company and has consistently generated strong returns through its culture of transparency, alignment and accountability. For more information, please visit compassdiversified.com.
Forward Looking Statements
Certain statements in this press release may be deemed forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements include, but are not limited to, statements as to our future performance or liquidity, such as expectations regarding our results of operations and financial condition, our 2022 Adjusted EBITDA, our 2022 Adjusted Earnings, our pending acquisitions and divestitures, and other statements with regard to the future performance of CODI. We may use words such as “plans,” “anticipate,” “believe,” “expect,” “intend,” “will,” “should,” “may,” “seek,” “look,” and similar expressions to identify forward-looking statements. The forward-looking statements contained in this press release involve risks and uncertainties. Actual results could differ materially from those implied or expressed in the forward-looking statements for any reason, including the factors set forth in “Risk Factors” and elsewhere in CODI’s annual report on Form 10-K and its quarterly reports on Form 10-Q. Other factors that could cause actual results to differ materially include: changes in the economy, financial markets and political environment; risks associated with possible disruption in CODI’s operations or the economy generally due to terrorism, natural disasters, social, civil and political unrest or the COVID-19 pandemic; future changes in laws or regulations (including the interpretation of these laws and regulations by regulatory authorities); general considerations associated with the COVID-19 pandemic and its impact on the markets in which we operate; disruption in the global supply chain, labor shortages and high labor costs; our business prospects and the prospects of our subsidiaries; the impact of, and ability to successfully complete and integrate, acquisitions that we may make; the ability to successfully complete divestitures when we’ve executed divestitures agreements; the dependence of our future success on the general economy and its impact on the industries in which we operate; the ability of our subsidiaries to achieve their objectives; the adequacy of our cash resources and working capital; the timing of cash flows, if any, from the operations of our subsidiaries; and other considerations that may be disclosed from time to time in CODI’s publicly disseminated documents and filings. Undue reliance should not be placed on such forward-looking statements as such statements speak only as of the date on which they are made. Although, except as required by law, CODI undertakes no obligation to revise or update any forward-looking statements, whether as a result of new information, future events or otherwise, you are advised to consult any additional disclosures that CODI may make directly to you or through reports that it in the future may file with the
Investor Relations: | Media Contact: |
irinquiry@compassdiversified.com | |
212.477.8438 | |
lberman@igbir.com | |
949.574.3860 | |
CODI@gatewayir.com |
Condensed Consolidated Balance Sheets
(in thousands) | (Unaudited) | ||||
Assets | |||||
Current assets | |||||
Cash and cash equivalents | $ | 61,252 | $ | 160,733 | |
Accounts receivable, net | 326,266 | 277,710 | |||
Inventories, net | 725,902 | 565,743 | |||
Prepaid expenses and other current assets | 81,130 | 57,006 | |||
Total current assets | 1,194,550 | 1,061,192 | |||
Property, plant and equipment, net | 193,749 | 186,477 | |||
1,194,251 | 882,083 | ||||
Intangible assets, net | 1,096,020 | 872,690 | |||
Other non-current assets | 162,727 | 141,819 | |||
Total assets | $ | 3,841,297 | $ | 3,144,261 | |
Liabilities and stockholders’ equity | |||||
Current liabilities | |||||
Accounts payable | $ | 100,511 | $ | 124,203 | |
Accrued expenses | 211,633 | 190,348 | |||
Due to related party | 15,368 | 12,802 | |||
Current portion, long-term debt | 10,000 | — | |||
Other current liabilities | 39,378 | 34,269 | |||
Total current liabilities | 376,890 | 361,622 | |||
Deferred income taxes | 153,202 | 97,763 | |||
Long-term debt | 1,784,365 | 1,284,826 | |||
Other non-current liabilities | 134,857 | 115,520 | |||
Total liabilities | 2,449,314 | 1,859,731 | |||
Stockholders' equity | |||||
Total stockholders' equity attributable to Holdings | 1,171,565 | 1,111,816 | |||
Noncontrolling interest | 220,418 | 172,714 | |||
Total stockholders' equity | 1,391,983 | 1,284,530 | |||
Total liabilities and stockholders’ equity | $ | 3,841,297 | $ | 3,144,261 | |
Consolidated Statements of Operations
(Unaudited)
Three months ended | Nine months ended | ||||||||||||||
(in thousands, except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||
Net sales | $ | 597,607 | $ | 488,158 | $ | 1,669,123 | $ | 1,372,266 | |||||||
Cost of sales | 358,291 | 296,027 | 996,210 | 818,307 | |||||||||||
Gross profit | 239,316 | 192,131 | 672,913 | 553,959 | |||||||||||
Operating expenses: | |||||||||||||||
Selling, general and administrative expense | 148,700 | 118,818 | 403,428 | 337,815 | |||||||||||
Management fees | 16,717 | 12,398 | 46,304 | 34,504 | |||||||||||
Amortization expense | 25,152 | 19,056 | 67,191 | 56,502 | |||||||||||
Operating income | 48,747 | 41,859 | 155,990 | 125,138 | |||||||||||
Other income (expense): | |||||||||||||||
Interest expense, net | (22,799 | ) | (13,855 | ) | (57,737 | ) | (42,607 | ) | |||||||
Amortization of debt issuance costs | (1,004 | ) | (759 | ) | (2,735 | ) | (2,167 | ) | |||||||
Loss on debt extinguishment | (534 | ) | — | (534 | ) | (33,305 | ) | ||||||||
Other income (expense), net | (2,141 | ) | 1,031 | 606 | (1,906 | ) | |||||||||
Net income from continuing operations before income taxes | 22,269 | 28,276 | 95,590 | 45,153 | |||||||||||
Provision for income taxes | 21,163 | 9,556 | 39,201 | 24,662 | |||||||||||
Income from continuing operations | 1,106 | 18,720 | 56,389 | 20,491 | |||||||||||
Income (loss) from discontinued operations, net of income tax | — | (1,309 | ) | — | 7,665 | ||||||||||
Gain on sale of discontinued operations | 1,479 | 72,745 | 6,893 | 72,745 | |||||||||||
Net income | 2,585 | 90,156 | 63,282 | 100,901 | |||||||||||
Less: Net income from continuing operations attributable to noncontrolling interest | 4,359 | 2,201 | 14,927 | 7,915 | |||||||||||
Less: Net income (loss) from discontinued operations attributable to noncontrolling interest | — | (145 | ) | — | 522 | ||||||||||
Net income (loss) attributable to Holdings | $ | (1,774 | ) | $ | 88,100 | $ | 48,355 | $ | 92,464 | ||||||
Amounts attributable to Holdings | |||||||||||||||
Income (loss) from continuing operations | (3,253 | ) | 16,519 | 41,462 | 12,576 | ||||||||||
Income (loss) from discontinued operations | — | (1,164 | ) | — | 7,143 | ||||||||||
Gain on sale of discontinued operations, net of income tax | 1,479 | 72,745 | 6,893 | 72,745 | |||||||||||
Net income (loss) attributable to Holdings | $ | (1,774 | ) | $ | 88,100 | $ | 48,355 | $ | 92,464 | ||||||
Basic income (loss) per common share attributable to Holdings | |||||||||||||||
Continuing operations | $ | (0.23 | ) | $ | (0.13 | ) | $ | 0.10 | $ | (0.46 | ) | ||||
Discontinued operations | 0.02 | 1.10 | 0.10 | 1.23 | |||||||||||
$ | (0.21 | ) | $ | 0.97 | $ | 0.20 | $ | 0.77 | |||||||
Basic weighted average number of common shares outstanding | 71,910 | 65,008 | 70,514 | 64,936 | |||||||||||
Cash distributions declared per Trust common share | $ | 0.25 | $ | 1.24 | $ | 0.75 | $ | 1.96 |
Net Income (Loss) to Non-GAAP Adjusted Earnings and Non-GAAP Adjusted EBITDA
(Unaudited)
Three months ended | Nine months ended | ||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||
Net income | $ | 2,585 | $ | 90,156 | $ | 63,282 | $ | 100,901 | |||||||
Gain on sale of discontinued operations | 1,479 | 72,745 | 6,893 | 72,745 | |||||||||||
Income (loss) from discontinued operations, net of tax | — | (1,309 | ) | — | 7,665 | ||||||||||
Income from continuing operations | $ | 1,106 | $ | 18,720 | $ | 56,389 | $ | 20,491 | |||||||
Less: income from continuing operations attributable to noncontrolling interest | 4,359 | 2,201 | 14,927 | 7,915 | |||||||||||
Net income (loss) attributable to Holdings - continuing operations | $ | (3,253 | ) | $ | 16,519 | $ | 41,462 | $ | 12,576 | ||||||
Adjustments: | |||||||||||||||
Distributions paid - Preferred Shares | (6,045 | ) | (6,045 | ) | (18,136 | ) | (18,136 | ) | |||||||
Amortization expense - intangibles and inventory step up | 26,241 | 19,056 | 72,092 | 56,502 | |||||||||||
Loss on debt extinguishment | 534 | — | 534 | 33,305 | |||||||||||
Stock compensation | 3,242 | 2,892 | 8,851 | 8,496 | |||||||||||
Acquisition expenses | 5,902 | 1,866 | 6,118 | 2,176 | |||||||||||
Integration Services Fee | 1,625 | 1,100 | 2,750 | 4,300 | |||||||||||
Held-for-sale tax impact - corporate | 16,457 | — | 12,119 | — | |||||||||||
Other | 1,287 | 460 | 4,116 | (609 | ) | ||||||||||
Adjusted Earnings | $ | 45,990 | $ | 35,848 | $ | 129,906 | $ | 98,610 | |||||||
Plus (less): | |||||||||||||||
Depreciation | 11,284 | 10,372 | 32,589 | 28,896 | |||||||||||
Income taxes | 21,163 | 9,556 | 39,201 | 24,662 | |||||||||||
Held-for-sale tax impact - corporate | (16,457 | ) | — | (12,119 | ) | — | |||||||||
Interest expense, net | 22,799 | 13,855 | 57,737 | 42,607 | |||||||||||
Amortization of debt issuance | 1,004 | 759 | 2,735 | 2,167 | |||||||||||
Noncontrolling interest | 4,359 | 2,201 | 14,927 | 7,915 | |||||||||||
Preferred distributions | 6,045 | 6,045 | 18,136 | 18,136 | |||||||||||
Other expense (income) | 2,139 | (1,032 | ) | (606 | ) | 1,906 | |||||||||
Adjusted EBITDA | $ | 98,326 | $ | 77,604 | $ | 282,506 | $ | 224,899 |
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Three months ended
(Unaudited)
Corporate | 5.11 | BOA | Ergo | Lugano | PrimaLoft | Velocity Outdoor | ACI | Altor Solutions | Arnold | Sterno | Consolidated | ||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (29,950 | ) | $ | 5,905 | $ | 8,935 | $ | (759 | ) | $ | 8,095 | $ | 4,230 | $ | (8,492 | ) | $ | 4,679 | $ | 2,426 | $ | 2,765 | $ | 3,475 | $ | (203 | ) | $ | 1,106 | |||||||||||||||
Adjusted for: | |||||||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 16,457 | 1,906 | 1,776 | (410 | ) | 1,166 | 1,609 | (3,570 | ) | 1,416 | 671 | 805 | 537 | (1,200 | ) | 21,163 | |||||||||||||||||||||||||||||
Interest expense, net | 22,725 | 2 | (7 | ) | — | 3 | 3 | (4 | ) | 70 | — | — | 7 | — | 22,799 | ||||||||||||||||||||||||||||||
Intercompany interest | (28,762 | ) | 3,503 | 1,808 | 1,737 | 3,263 | 1,812 | 3,251 | 2,997 | 1,621 | 2,821 | 1,402 | 4,547 | — | |||||||||||||||||||||||||||||||
Loss on debt extinguishment | 534 | — | — | — | — | — | — | — | — | — | — | — | 534 | ||||||||||||||||||||||||||||||||
Depreciation and amortization expense | 285 | 5,766 | 5,577 | 2,033 | 3,083 | 2,504 | 4,194 | 3,420 | 538 | 4,124 | 1,936 | 5,069 | 38,529 | ||||||||||||||||||||||||||||||||
EBITDA | (18,711 | ) | 17,082 | 18,089 | 2,601 | 15,610 | 10,158 | (4,621 | ) | 12,582 | 5,256 | 10,515 | 7,357 | 8,213 | 84,131 | ||||||||||||||||||||||||||||||
Other (income) expense | (73 | ) | 709 | 403 | — | — | (1 | ) | 260 | 971 | 224 | 110 | — | (463 | ) | 2,140 | |||||||||||||||||||||||||||||
Non-controlling shareholder compensation | — | 381 | 621 | 362 | 356 | 537 | — | 240 | 124 | 375 | 13 | 232 | 3,241 | ||||||||||||||||||||||||||||||||
Acquisition expenses | — | — | — | — | — | — | 5,680 | 222 | — | — | — | — | 5,902 | ||||||||||||||||||||||||||||||||
Integration services fee | — | — | — | — | 562 | — | 1,063 | — | — | — | — | — | 1,625 | ||||||||||||||||||||||||||||||||
Other | — | — | — | — | — | — | — | — | 853 | — | — | 434 | 1,287 | ||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (18,784 | ) | $ | 18,172 | $ | 19,113 | $ | 2,963 | $ | 16,528 | $ | 10,694 | $ | 2,382 | $ | 14,015 | $ | 6,457 | $ | 11,000 | $ | 7,370 | $ | 8,416 | $ | 98,326 |
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Three months ended
(Unaudited)
Corporate | 5.11 | BOA | Ergo | Lugano | Velocity Outdoor | ACI | Altor Solutions | Arnold | Sterno | Consolidated | |||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (10,553 | ) | $ | 5,223 | $ | 4,256 | $ | (531 | ) | $ | 681 | $ | 2,235 | $ | 8,568 | $ | 3,821 | $ | 2,594 | $ | 2,245 | $ | 181 | $ | 18,720 | |||||||||||||||||
Adjusted for: | |||||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | — | 1,830 | 700 | 329 | 304 | 631 | 2,334 | 1,093 | 1,336 | 1,058 | (58 | ) | 9,557 | ||||||||||||||||||||||||||||||
Interest expense, net | 13,813 | 1 | — | — | — | 1 | 35 | — | — | 5 | — | 13,855 | |||||||||||||||||||||||||||||||
Intercompany interest | (17,717 | ) | 2,960 | 1,958 | 441 | 548 | 697 | 1,902 | 1,792 | 1,657 | 1,313 | 4,449 | — | ||||||||||||||||||||||||||||||
Depreciation and amortization | 243 | 5,868 | 5,149 | 2,050 | 70 | 2,155 | 3,161 | 557 | 3,206 | 2,005 | 5,722 | 30,186 | |||||||||||||||||||||||||||||||
EBITDA | (14,214 | ) | 15,882 | 12,063 | 2,289 | 1,603 | 5,719 | 16,000 | 7,263 | 8,793 | 6,626 | 10,294 | 72,318 | ||||||||||||||||||||||||||||||
Other (income) expense | (433 | ) | (2 | ) | 110 | — | 22 | (11 | ) | (2 | ) | 55 | (267 | ) | (51 | ) | (453 | ) | (1,032 | ) | |||||||||||||||||||||||
Non-controlling shareholder compensation | — | 639 | 572 | 434 | — | 275 | 253 | 124 | 257 | 8 | 330 | 2,892 | |||||||||||||||||||||||||||||||
Acquisition expenses | 39 | — | — | — | 1,827 | — | — | — | — | — | — | 1,866 | |||||||||||||||||||||||||||||||
Integration services fees | — | — | 1,100 | — | — | — | — | — | — | — | — | 1,100 | |||||||||||||||||||||||||||||||
Other | 187 | 273 | — | — | — | — | — | — | — | — | — | 460 | |||||||||||||||||||||||||||||||
Adjusted EBITDA(1) | $ | (14,421 | ) | $ | 16,792 | $ | 13,845 | $ | 2,723 | $ | 3,452 | $ | 5,983 | $ | 16,251 | $ | 7,442 | $ | 8,783 | $ | 6,583 | $ | 10,171 | $ | 77,604 |
(1) As a result of the sale of Liberty Safe in
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Nine months ended
(Unaudited)
Corporate | 5.11 | BOA | Ergo | Lugano | PrimaLoft | Velocity Outdoor | ACI | Altor Solutions | Arnold | Sterno | Consolidated | ||||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (51,431 | ) | $ | 15,540 | $ | 37,122 | $ | (634 | ) | $ | 21,871 | $ | 8,374 | $ | (8,492 | ) | $ | 7,826 | $ | 9,510 | $ | 7,149 | $ | 7,217 | $ | 2,337 | $ | 56,389 | ||||||||||||||||
Adjusted for: | |||||||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | 12,119 | 4,999 | 6,819 | 432 | 5,863 | 2,821 | (3,570 | ) | 2,372 | 2,600 | 2,907 | 2,768 | (929 | ) | 39,201 | ||||||||||||||||||||||||||||||
Interest expense, net | 57,559 | 12 | (19 | ) | 2 | 12 | 13 | (4 | ) | 142 | — | — | 20 | — | 57,737 | ||||||||||||||||||||||||||||||
Intercompany interest | (71,727 | ) | 9,501 | 5,634 | 4,000 | 7,841 | 4,649 | 3,251 | 6,987 | 4,851 | 7,844 | 3,947 | 13,222 | — | |||||||||||||||||||||||||||||||
Loss on debt extinguishment | 534 | — | — | — | — | — | — | — | — | — | — | — | 534 | ||||||||||||||||||||||||||||||||
Depreciation and amortization expense | 862 | 16,804 | 16,345 | 6,061 | 8,385 | 9,558 | 4,194 | 9,981 | 1,634 | 12,254 | 6,065 | 15,272 | 107,415 | ||||||||||||||||||||||||||||||||
EBITDA | (52,084 | ) | 46,856 | 65,901 | 9,861 | 43,972 | 25,415 | (4,621 | ) | 27,308 | 18,595 | 30,154 | 20,017 | 29,902 | 261,276 | ||||||||||||||||||||||||||||||
Other (income) expense | (73 | ) | 93 | 498 | 4 | 2 | (1,829 | ) | 260 | 1,154 | 251 | 219 | — | (1,185 | ) | (606 | ) | ||||||||||||||||||||||||||||
Non-controlling shareholder compensation | — | 1,210 | 1,889 | 1,154 | 800 | 1,089 | — | 742 | 372 | 910 | 38 | 647 | 8,851 | ||||||||||||||||||||||||||||||||
Acquisition expenses | — | — | — | — | — | — | 5,680 | 222 | — | 216 | — | — | 6,118 | ||||||||||||||||||||||||||||||||
Integration services fee | — | — | — | — | 1,688 | — | 1,063 | — | — | — | — | — | 2,751 | ||||||||||||||||||||||||||||||||
Other | — | — | — | 250 | — | 1,802 | — | — | 853 | — | — | 1,211 | 4,116 | ||||||||||||||||||||||||||||||||
Adjusted EBITDA | $ | (52,157 | ) | $ | 48,159 | $ | 68,288 | $ | 11,269 | $ | 46,462 | $ | 26,477 | $ | 2,382 | $ | 29,426 | $ | 20,071 | $ | 31,499 | $ | 20,055 | $ | 30,575 | $ | 282,506 |
Net Income (Loss) from Continuing Operations to Non-GAAP Consolidated Adjusted EBITDA Reconciliation
Nine months ended
(Unaudited)
Corporate | 5.11 | BOA | Ergo | Lugano | Velocity Outdoor | ACI | Altor Solutions | Arnold | Sterno | Consolidated | ||||||||||||||||||||||||||||||||
Income (loss) from continuing operations | $ | (64,717 | ) | $ | 14,318 | $ | 16,908 | $ | 3,071 | $ | 681 | $ | 9,485 | $ | 19,157 | 10,366 | $ | 5,892 | $ | 3,839 | $ | 1,491 | $ | 20,491 | ||||||||||||||||||
Adjusted for: | ||||||||||||||||||||||||||||||||||||||||||
Provision (benefit) for income taxes | — | 4,857 | 2,165 | 1,357 | 304 | 2,920 | 5,381 | 2,547 | 2,867 | 2,062 | 202 | 24,662 | ||||||||||||||||||||||||||||||
Interest expense, net | 42,464 | 8 | — | — | — | 5 | 125 | — | — | 5 | — | 42,607 | ||||||||||||||||||||||||||||||
Intercompany interest | (53,234 | ) | 8,743 | 6,320 | 1,514 | 548 | 1,890 | 5,586 | 5,484 | 5,075 | 4,128 | 13,946 | — | |||||||||||||||||||||||||||||
Loss on debt extinguishment | 33,305 | — | — | — | — | — | — | — | — | — | — | 33,305 | ||||||||||||||||||||||||||||||
Depreciation and amortization | 642 | 16,762 | 15,033 | 6,377 | 70 | 6,377 | 9,489 | 1,658 | 9,022 | 5,822 | 16,313 | 87,565 | ||||||||||||||||||||||||||||||
EBITDA | (41,540 | ) | 44,688 | 40,426 | 12,319 | 1,603 | 20,677 | 39,738 | 20,055 | 22,856 | 15,856 | 31,952 | 208,630 | |||||||||||||||||||||||||||||
Other (income) expense | (286 | ) | (302 | ) | 190 | — | 22 | 881 | 2,611 | 123 | (399 | ) | (51 | ) | (883 | ) | 1,906 | |||||||||||||||||||||||||
Non-controlling shareholder compensation | — | 1,926 | 1,655 | 1,241 | — | 826 | 777 | 372 | 770 | 16 | 913 | 8,496 | ||||||||||||||||||||||||||||||
Acquisition expenses | 39 | — | — | — | 1,827 | — | — | — | — | 310 | — | 2,176 | ||||||||||||||||||||||||||||||
Integration services fees | — | — | 3,300 | — | — | 1,000 | — | — | — | — | — | 4,300 | ||||||||||||||||||||||||||||||
Other | 1,085 | 273 | — | — | — | (2,300 | ) | — | — | — | 333 | (609 | ) | |||||||||||||||||||||||||||||
Adjusted EBITDA(1) | $ | (40,702 | ) | $ | 46,585 | $ | 45,571 | $ | 13,560 | $ | 3,452 | $ | 23,384 | $ | 40,826 | $ | 20,550 | $ | 23,227 | $ | 16,131 | $ | 32,315 | $ | 224,899 |
(1) As a result of the sale of Liberty Safe in
Non-GAAP Adjusted EBITDA
(Unaudited)
Three months ended | Nine months ended | |||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Branded Consumer | ||||||||||||||||
5.11 | $ | 18,172 | $ | 16,792 | $ | 48,159 | $ | 46,585 | ||||||||
BOA | 19,113 | 13,845 | 68,288 | 45,571 | ||||||||||||
Ergobaby | 2,963 | 2,723 | 11,269 | 13,560 | ||||||||||||
Lugano(1) | 16,528 | 3,452 | 46,462 | 3,452 | ||||||||||||
10,694 | 5,983 | 26,477 | 23,384 | |||||||||||||
PrimaLoft(2) | 2,382 | — | 2,382 | — | ||||||||||||
Velocity Outdoor | 14,015 | 16,251 | 29,426 | 40,826 | ||||||||||||
Total Branded Consumer | $ | 83,867 | $ | 59,046 | $ | 232,463 | $ | 173,378 | ||||||||
Advanced Circuits | $ | 6,457 | $ | 7,442 | $ | 20,071 | $ | 20,550 | ||||||||
Altor Solutions | 11,000 | 8,783 | 31,499 | 23,227 | ||||||||||||
Arnold Magnetics | 7,370 | 6,583 | 20,055 | 16,131 | ||||||||||||
Sterno | 8,416 | 10,171 | 30,575 | 32,315 | ||||||||||||
$ | 33,243 | $ | 32,979 | $ | 102,200 | $ | 92,223 | |||||||||
Corporate expense | (18,784 | ) | (14,421 | ) | (52,157 | ) | (40,702 | ) | ||||||||
Total Adjusted EBITDA | $ | 98,326 | $ | 77,604 | $ | 282,506 | $ | 224,899 |
(1 | ) | The above results for Lugano do not include management's estimate of Adjusted EBITDA, before the Company's ownership, of | |
(2 | ) | The above results for PrimaLoft do not include management's estimate of Adjusted EBITDA, before the Company's ownership, of |
(unaudited)
Three months ended | Nine months ended | |||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||
$ | 597,607 | $ | 488,158 | $ | 1,669,123 | $ | 1,372,266 | |||||
Acquisitions (1) | 2,319 | 31,581 | 55,185 | 123,446 | ||||||||
Pro | $ | 599,926 | $ | 519,739 | $ | 1,724,308 | $ | 1,495,712 |
(1) Acquisitions reflects the net sales for Lugano and PrimaLoft on a pro forma basis as if the Company had acquired these businesses on
Subsidiary Pro
(unaudited)
Three months ended | Nine months ended | |||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||
Branded Consumer | ||||||||||||
5.11 | $ | 126,537 | $ | 111,099 | $ | 350,608 | $ | 321,009 | ||||
BOA | 50,019 | 39,496 | 166,215 | 120,033 | ||||||||
Ergobaby | 21,540 | 19,816 | 68,256 | 69,100 | ||||||||
Lugano(1) | 51,145 | 29,498 | 137,229 | 81,881 | ||||||||
42,753 | 25,040 | 122,481 | 86,328 | |||||||||
PrimaLoft(1) | 13,031 | 12,906 | 65,897 | 52,388 | ||||||||
Velocity Outdoor | 75,482 | 76,901 | 180,774 | 205,891 | ||||||||
Total Branded Consumer | $ | 380,507 | $ | 314,756 | $ | 1,091,460 | $ | 936,630 | ||||
Advanced Circuits | $ | 21,788 | $ | 23,182 | $ | 67,194 | $ | 67,209 | ||||
Altor Solutions | 69,618 | 44,122 | 199,590 | 122,582 | ||||||||
Arnold Magnetics | 39,377 | 36,852 | 116,319 | 101,893 | ||||||||
Sterno | 88,636 | 100,827 | 249,745 | 267,398 | ||||||||
$ | 219,419 | $ | 204,983 | $ | 632,848 | $ | 559,082 | |||||
Total Subsidiary | $ | 599,926 | $ | 519,739 | $ | 1,724,308 | $ | 1,495,712 |
(1) Net sales for Lugano and PrimaLoft are pro forma as if the Company had acquired these businesses on
Condensed Consolidated Cash Flows
(unaudited)
Three months ended | Nine months ended | ||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | |||||||||||
Net cash provided by (used in) operating activities | $ | (4,585 | ) | $ | 37,714 | $ | (39,923 | ) | $ | 147,148 | |||||
Net cash used in investing activities | (576,713 | ) | (149,733 | ) | (598,951 | ) | (202,429 | ) | |||||||
Net cash provided by financing activities | 538,531 | 72,195 | 542,128 | 54,872 | |||||||||||
Foreign currency impact on cash | (1,603 | ) | (104 | ) | (2,735 | ) | (96 | ) | |||||||
Net decrease in cash and cash equivalents | (44,370 | ) | (39,928 | ) | (99,481 | ) | (505 | ) | |||||||
Cash and cash equivalents - beginning of the period | 105,622 | 110,167 | 160,733 | 70,744 | |||||||||||
Cash and cash equivalents - end of the period | $ | 61,252 | $ | 70,239 | $ | 61,252 | $ | 70,239 |
Selected Financial Data - Cash Flows | ||||||||||||||||
(unaudited) | ||||||||||||||||
Three months ended | Nine months ended | |||||||||||||||
(in thousands) | 2022 | 2021 | 2022 | 2021 | ||||||||||||
Changes in operating assets and liabilities | $ | (63,998 | ) | $ | (11,566 | ) | $ | (223,164 | ) | $ | (14,720 | ) | ||||
Purchases of property and equipment | $ | (15,086 | ) | $ | (11,423 | ) | $ | (39,683 | ) | $ | (28,001 | ) | ||||
Distributions paid - common shares | $ | (17,931 | ) | $ | (80,476 | ) | $ | (52,794 | ) | $ | (127,204 | ) | ||||
Distributions paid - preferred shares | $ | (6,045 | ) | $ | (6,045 | ) | $ | (18,136 | ) | $ | (18,136 | ) |
Source:
2022 GlobeNewswire, Inc., source